How Much Are Shandong Weigao Group Medical Polymer Company Limited (HKG:1066) Insiders Taking Off The Table?

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Shandong Weigao Group Medical Polymer Company Limited (HKG:1066).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for Shandong Weigao Group Medical Polymer

The Last 12 Months Of Insider Transactions At Shandong Weigao Group Medical Polymer

The Executive Vice Chairman, Yi Wang, made the biggest insider sale in the last 12 months. That single transaction was for HK$107m worth of shares at a price of HK$21.27 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is HK$15.64. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Yi Wang.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that Shandong Weigao Group Medical Polymer insiders own 1.5% of the company, worth about HK$1.0b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Shandong Weigao Group Medical Polymer Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Shandong Weigao Group Medical Polymer shares in the last quarter. While we feel good about high insider ownership of Shandong Weigao Group Medical Polymer, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 1 warning sign for Shandong Weigao Group Medical Polymer and we suggest you have a look.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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